Airbnb on shortlist to provide rooms for 2016 Olympics in Rio

(Reuters) – Online home-rental marketplace Airbnb Inc is one of three firms being considered to provide additional rooms for the 2016 Summer Olympic Games in Rio de Janeiro, as the city scrambles to accommodate visiting fans and athletes, three sources with direct knowledge of the situation told Reuters.

An Olympics contract would be a significant step into the mainstream for Airbnb, which allows home owners to rent their properties on a temporary basis. The company has become one of Silicon Valley’s most successful start-ups in the five years since it was founded by a trio of graduates from the Rhode Island School of Design and Harvard.

It would also potentially be the first time a major sporting event turned to the general public, and their extra rooms, to solve a short-term spike in demand for accommodation. By contrast, in London for the 2012 Olympics some home owners faced potential fines for renting their properties during the Games.

Airbnb declined to comment.

The two other short-listed firms are AlugueTemporada and Hotel Urbano.

Accommodation in Rio has long been a concern for the International Olympic Committee and it was singled out again as an area where progress needed to be made by Nawal El Moutawakel, IOC Coordination Commission Chairperson, at a news conference in Rio on Wednesday.

Speaking at the same conference, Carlos Nuzman, president of the Local Organizing Committee, said Rio already had 36,000 of the 40,000 or so rooms it needs for the Olympics. But he added that the committee was working to secure more accommodation.

“We might be in a position in which we can offer much more than forecast and the additional supply could reach 18,000, half of the total amount we have at the moment,” Nuzman said.

Partnering with a company such as Airbnb could also help to provide more economic options for visiting fans. The soccer World Cup, held in Brazil in 2014, was criticized for the cost of accommodation, particularly in Rio where the final was played.

The true value of HomeAway

Brian Sharples, CEO and founder of the vacation-home rentals site HomeAway, made it through 20 minutes or so of our conversation this week without mentioning his sort-of rival Airbnb.

He was visiting San Francisco to talk about HomeAway’s 10th anniversary and its plans for the future. He recounted how shortly after starting the company he began buying up as many leading sites as possible in markets around the world that offered second-home listings. Two of the earliest were HomeAway and VRBO, short for “vacation rental by owner.”

Sharples explained that his Austin, Texas-based company had raised a total of $405 million in venture-capital money before going public in mid-2011. The money came from big-money backers including Austin Ventures, TCV, IVP, Redpoint Ventures, and Google Ventures. On the day the stock market plummeted in 2008 HomeAway closed a $225-million funding round—all to continue its rollup strategy of buying more 20 like-minded listings sites.

The company spent its money well, building a profitable business whose revenues are approaching $500 million. (HomeAway reports earnings next week.) Its valuation is nearly $3 billion, and Sharples said the company has been preoccupied for its first decade with consolidating its many acquisitions on a single technology platform.

With all that rationalizing and tinkering, there are things HomeAway has neglected. “We haven’t spent on an extraordinary user experience and marketing,” said Sharples. “On day one we had 60,000 listings. Today we have 1.05 million listings. Yet there are still 10 million vacation homes available throughout the world. We still have a big opportunity in front of us.”

Sharples is proud of his company’s heft. “We’ll do $12 billion in transactions this year as a company,” he said. “We have two to three times the traffic worldwide of Airbnb.”

Oops. There it was. The dreaded “A” word. And then later the “S” word, for sharing.

You see, HomeAway isn’t Airbnb. Its valuation isn’t theoretical, for one thing, like the reported $10 billion private-market valuation of that other company. “If you track our stock, you can pretty much track it to our EBITDA guidance,” said Sharples, unsubtly implying that HomeAway is valued on its performance, not hype.

HomeAway also makes the majority of its revenue from subscriptions paid by homeowners, rather than commissions paid by renters, Airbnb’s main method. “The sharing economy,” said Sharples, “which I don’t consider ourselves part of, survives not because people want to save the environment, but because it’s cheap. When things are sold in an economy very cheaply, the company that is selling that for a percentage, gets a very small piece of that. Airbnb is rumored to have a $300 to $400 average ticket. Ten percent of that is $30. Now the question is: What’s the cost of acquiring that customer? In our experience it costs north of $40 to find that customer. Our average customer stays for a week and spends $2,000. (HomeAway collects in the neighborhood of $500 to $600 per year from homeowners.)

To hear Sharples explain it, HomeAway and Airbnb couldn’t be more different. His company caters to people wealthy enough to own a second home. The other guys are catering to scrappers who are so hard up they offer a room in their home to strangers.

In truth, the two companies are beginning to go after each other’s business. As such, Sharples is ready to narrow the gap in awareness between the high-flying Airbnb and the lower-profile HomeAway. “We will increase marketing spend 50% this year,” he said. “Last year we spent 60 million on marketing.”

One thing could trip up the plans Sharples is making. The three monoliths of travel sites—Priceline, Expedia, and TripAdvisor—each have shown an interest in the second-home listings market of late. Priceline PCLN has been rumored to covet HomeAway, which, along with its earnings guidance, drives the smaller company’s stock price from time to time.

Sharples professes no interest in selling, but he’s done it before. In the 1990s he sold the research company he headed, IntelliQuest, to advertising giant WPP. For now he has a business to run—and a competitor he’s trying his level best to ignore.

IPOs raised $249 billion in 2014, and the fundraising frenzy could continue

A company looking to raise money in 2014 didn’t have to look too far. Last year was the busiest for initial public offerings since 2010.

From Alibaba Group’s $25 billion IPO to much-hyped smaller listings, such as GoPro GPRO and Ally Financial ALLY, companies listing on the stock markets raised $249 billion worldwide, according to data collected by Thompson Reuters. Even without Alibaba’s record-breaking offering, last year was a standout period for IPOs.

IPOs picked up pace from 2013: about 40% more companies listed on public markets in 2014 compared to the year prior. They also raised more money. Leaving out Alibaba’s BABA offering, which many agree is a once-in-a-generation kind of IPO, companies raised almost 36% more money year-over-year, according to the New York Times.

The booming market has led some analysts to speculate that it is inflated past realistic valuations, pumped up by overly optimistic investors. For instance, Lending Club’s LC December IPO valued the online lender at 35 times estimated revenue for 2017, which would put it on par with tech companies such as Facebook.

The public markets weren’t the only place to raise big bucks. The private market also saw big number sums, including Uber’s $1.8 billion fundraising round that valued it at $40 billion. Chinese smart phone maker Xiaomi and online home rental service Airbnb also raised huge sums that valued the startups at $10 billion or more.

Fundraising in both the public and private markets have been driven by a confluence of factors, including low interest rates that have pushed investors toward higher-growth opportunities and a skyrocketing stock market.

While no mega-IPO like Alibaba is set for the year ahead, there are some big-name companies that are scheduled to go public, including file-sharing startup Box and “fine casual” dining chain Shake Shack.

Other potential IPOs remain the subject of much speculation. Investors are watching startups such as Uber, Pinterest and Fitbit carefully, though none have yet indicated when or if they will list on public markets.

Share the profits. Share the losses. The sharing economy gets even more share-y.

Another step in the development of the fast-growing sharing economy is that it is getting its own insurance policies, designed to stabilize income generated by driving strangers around town or letting them stay in your home.

The public policy nonprofit organizationPeers just announced that it has created two separate pools protecting employees of the sharing economy from disastrous, emergency situations. Accommodations hosts and ridesharing drivers can opt in to an insurance program protecting against damages or losses due to unexpected disruptions in employment.

As such, Peers launched Homesharing Liability Insurance, a personal liability insurance that covers a host on any accommodations hosting service he or she might operate through. Airbnb is the most well known homesharing site, but there are others, like HomeAway.com and VacationRentals.com. For $36 per month, a host gets protection for up to $1 million of bodily injury to your guest or property damage suffered by your guest. The insurance will also cover a host for up to three months lost income, up to $5,000, if a host damages your home. Oh, and you can opt into the insurance for only the months that you need it.

Meanwhile, the Keep Driving insurance option gives ridesharing drivers working for companies like Uber, Lyft or Sidecar access to a working car in the event that theirs is damaged in an accident. Ridesharing companies don’t let drivers work out of other people’s cars, but the program designed by Peers partners ridesharing drivers with cars through the hybrid rental company Breeze. The Keep Driving program, available for $20 per month, is also available for delivery drivers not employed by a ridesharing company.

Airbnb exec on the company’s biggest mistake

A lack of diversity in leadership may have been the source of Airbnb’s biggest mistake in the last year, the company’s head of global operations said Wednesday.

Varsha Rao started working at Airbnb last year. She shared at Fortune‘s inaugural Most Powerful Women Next Gen Summit that she realized pretty quickly that the company wasn’t really even thinking about venturing into Asia. Why is that a problem? Asia comprises 25% of the global travel market, Rao told an audience of around 250 rising women leaders.

“We have been a global business from day one,” she said. “We started out in New York and San Francisco, but we never addressed the Asian market. I think for us as a company, we didn’t have the knowledge or expertise to build a market out there.”

That changed when Rao came in. A former SVP of international for LivingSocial and the former CEO of Singtel Digital Media in Singapore, Rao had lived in Asia for five years. She not only knew the market, but she had a deep understanding of its potential. Without listing specifics, Rao said that in the last year Airbnb has invested “a lot more in the area,” thanks in large part to her insistence to pushing the initiative.

“It is not that easy to invest and make decisions in areas that you are not comfortable with. Making sure that you have a good diversity of experiences and voices is important,” she said.

Rao spoke on a panel discussion on entrepreneurship and networking with Ellevate Chair Sallie Krawcheck. Unlike Rao, who has spent her entire career at startups, Krawcheck started in corporate America before venturing into entrepreneurship. The ex-banker who now owns a global professional women’s network did not share her biggest mistake in the last year. Yet she did say that companies, big or small, will suffer if executives do not live their own company values.

“If you are not living the values, it is worse than not having them,” she said. “You don’t know of a company in the world that says they don’t value their people. But what does it mean when you fire someone not for cause and give them 20 minutes before the announcement goes out? If you act like that, your entire corporate statement should be crumpled up and put in the garbage can.”

Krawcheck knows a thing or two about getting fired. She lost her job not only as former president of Bank of America Wealth Management but also as the CEO of Citi Wealth Management. How did she get through both rounds of what she calls “getting sent home”? Networking, she said.

“Fail to network at your own peril and network only at your own company at your own peril,” she said. “[When I got fired] my outside network rose up. I believe in networking so much I bought a network,” she said with a laugh.

Most Powerful Women Next Gen: Who’s coming, what to expect

The stage is assembled, the programs are printed, the gift bags stuffed, the last conference call has concluded, and– always the very last step in the process—my blowout appointment is booked. Tomorrow we kick off the Fortune Most Powerful Women Next Gen Summit here in San Francisco, a gathering of 250-plus rising star women in business and leadership and inaugural effort at connecting with and inspiring the next generation of women in business.

For a day and a half, we’ll bring some of the biggest names in business together and try to capture and add to the momentum that’s powering this group—because they are commanding some serious energy right now.

This is the latest of many new extensions of the Fortune Most Powerful Women Summit, and in many ways, it is our most important. Women are achieving more in business across the board, but this is especially true at the younger age range. Part of this is due to the startup explosion; but women also are having a huge impact within large corporations. Indeed, one of the things that surprised us most as the registrations and applications started rolling in were the numbers of women from within Fortune 500 corporations and their very senior titles.

Loosely speaking, we define “next generation” as 45 and under. We settled on this definition for a few reasons; one, our Most Powerful Women Summit tends to capture the truly powerful women in their late 40s and above. But “under 40” seemed too young for what we wanted to achieve—and would fail to capture the leaders in that important “sweet spot” where women’s careers tend to surge, the years between 40 and 44.

It seems that we have struck a chord. We sold out in record time. We have a waitlist 200-women strong. (For those who didn’t make it in, the event will be streamed live. Come check it out here at 3:45 pm PST.) There seems to be a huge appetite to connect, learn, network and get inspired among this group.

And the program? We are very grateful to have some serious wattage on stage. We’ll have lots of high profile “next generation” women, like Theranos founder and CEO Elizabeth Holmes, Alicia Boler-Davis, SVP of General Motors and Airbnb head of operations Varsha Rao. We’ll have several startup founders on stage, including Clara Shih, Ruzwana Bashir of Peek.com, Debbie Sterling of Goldiblox, Julia Hartz of Eventbrite and Rachel Shechtman of Story. We’ve also tapped some key members of our MPW community to lend their wisdom: we’re thrilled to have Roz Brewer, president and CEO of Sam’s Club, with us, as well as Ellevate’s Sallie Krawchek, negotiation expert Vicki Medvec and venture capitalist Aileen Lee.

I’m especially looking forward to interviewing Mellody Hobson, president of Ariel Investments, chair of Dreamworks and director of Starbucks and Estee Lauder; Mellody will kick things off as our opening night speaker (along with Piper Kernan, the author of Orange is the New Black and the real-life protagonist of the hit show).

It’s hard to pick favorites among this lineup, but the top things I’m looking forward to are:

-Hearing from Varsha Rao, head of operations of Airbnb. Varsha is the rare Silicon Valley executive that hasn’t spoken much publicly, so this will be a great opportunity to hear insights and observations from her powerful perch in the rapidly changing sharing economy. She’ll share the stage with Sallie Krawchek, who will share her own lessons, in a session moderated by Karen Finerman of CNBC.

-I’m looking forward to hearing from Vanessa Hood, government lead at Palantir—the low- profile, super-influential startup that uses data to investigate crime and fraud for governments and business clients around the world. Vanessa will give us a demo on a fascinating breakthrough the company has made.

-I can’t wait to hear lessons, tips and war stories on negotiation from the always-entertaining Vicki Medvec, a regular on stage at the Most Powerful Women Summit and who this time will trade negotiation tactics with Twitter general counsel Vijaya Gadde.

-I always love hearing tales from the trenches from entrepreneurs, and we’ve got a great session featuring three of them: Rachel Shechtman of STORY, Susan Coelius Keplinger of Triggit and Meredith Perry of Ubeam.

-I’m looking forward to my conversation with Equinox president Sarah Robb O’Hagan and Onyx Pharmaceuticals’ Naseem Zojwalla. We’ll talk about health, fitness, and overall wellness from two very different perspectives.

-Finally, I’m really looking forward to my interview with Mellody Hobson. Mellody is a veteran big-company director, a dispenser of great and entertaining career advice and stories, and she has a compelling personal story. This year she’s been speaking up about race a lot more—we’ll touch on that, too. Twenty minutes won’t be nearly enough with her. (What else should I ask Mellody? Feel free to let me know at leigh_gallagher@Fortune.com)

But like all MPW events, the sessions that surprise, provoke and entertain most will likely be ones I least expected. That’s the thing about live events—you never quite know what’s going to happen. We’ve done our best to set the stage for an insightful, educational, thought-provoking, inspiring day and a half. And now, let the games begin. See you on the other side!

“From the MPW Co-chairs” is a series where the editors who oversee theFortune Most Powerful Women brand share their insights about women leaders.

Without downplaying the seriousness of these events, I believe the fundamental issues posed by Uber have less to do with the company’s specifics and more to do with a business model that works by offloading responsibilities, something that many other platform companies—businesses that make money by making connections rather than providing a real product or service—do as well. I am not sure people fully appreciate the many problems inherent in this type of business.

This summer, I used Airbnb to rent a house in Claremont, Calif. The booking fee was $79—more than 10% of the rental cost. Did the house have a king-sized bed, I inquired of the owner? She would put one in time for our rental, she assured me by e-mail.

Four weeks before the reservation date, I tried to reach her. No response. Airbnb provided only modest help, with a long lag between e-mailing them and getting any reply. In the end, no king-sized bed, so we stayed at the Sheraton in Pomona as hotels in Claremont were fully booked by that time. Airbnb did, with some prodding, refund our entire booking fee, but they didn’t have to. As the company’s terms of service clearly state, this is an online platform and “Airbnb is not an owner or operator of properties.”

What a great business model. Airbnb collects money for providing a matching service on a highly scalable IT platform but faces none of the normal operating costs entailed in providing accommodations. The company is not responsible for maintenance and repairs, cleaning (or cleanliness, an issue that has caused a colleague of mine in Berkeley to stop using them)—or anything, really.

Making a business out of not being responsible

Of course, Airbnb is not alone in perfecting a business model in which companies take fees for doing nothing other than facilitating transactions. As it makes abundantly clear in its terms of service, Uber does not function as a transportation carrier nor does it provide logistics services. Passengers and drivers, and maybe even pedestrians in the way of Uber cars, are pretty much on their own.

Similarly, eBay is not a retailer. As it explains in its user agreement, eBay does not “guarantee the existence, quality, safety, or legality of items advertised.” I bet the retailers who get stuck with toys with lead in them or with inventory they can’t sell wish they had thought of such a clever out.

The list of companies that build platforms but eschew responsibility for the quality or even availability of goods or services grows daily, and why not? Margins can be enormous if you don’t have to deliver anything other than a website.

Give these companies credit for learning from experience. Remember Webvan, the startup run by a former Accenture executive that ran through $1 billion in an effort to build a business delivering groceries to homes? Webvan hired employees to drive trucks that the company purchased to haul products from its own distribution centers operated by extraordinarily complex software. Dumb business plan. Today, companies such as Instacart use contractors, not employees, to buy products at existing grocery stores and deliver it to people. Much less investment and risk.

Amazon could follow suit and raise its profit margins significantly. Why should it have warehouses or warehouse employees? It, too, could turn itself entirely into a transaction facilitator and simply take a cut for bringing buyers and sellers together—never needing to house a book or anything else it sells.

No responsibility, greater profits

So, what’s wrong with this? Nothing, if you don’t mind a sort of Wild West business ecosystem. The nice thing about big companies with substantive physical businesses is that you can collect taxes from them, regulate them, enforce employment laws, and do all the other things that go out the window in the “new economy.”

For example, while Airbnb posts requirements for its “hosts” to adhere to disability and anti-discrimination laws on its website, enforcement is obviously much tougher than it would be in dealing with a hotel chain. Many cities and counties that have passed hotel and occupancy taxes aren’t going to collect from Airbnb, which has finally agreed to collect taxes only in a handful of cities and leaves it to the individual “hosts” to comply with tax regulations.

There are regulations that govern how long people, particularly in transportation, can work. These regulations seek to protect drivers and others from accidents. Good luck enforcing those rules on thousands of independent contractors. And say goodbye to unemployment insurance and employer contributions to Social Security—because most of the people working for these companies are independent contractors, not employees.

The other nice thing about real businesses providing real products and services is that if there are problems, there is an entity that can offer remedies. The old Webvan would be responsible if it delivered rotten produce or bad meat from its warehouses, but not the new delivery services. Retailers like Nordstrom guarantee their products’ quality, not eBay. Limousine companies have established liability for hiring and supervising their drivers, and paying when things go wrong. Not Uber, although that remains to be seen as cases wind through court. Hotels carry liability insurance and have the financial wherewithal to protect guests who are assaulted by their workers or otherwise harmed by building safety problems. Not Airbnb, which certainly has plenty of financial resources but, as a “non-operator,” has shed any responsibility for what happens to you in your temporary rental.

Offloading responsibility, including the responsibility for liability insurance, compliance with government regulations, and payroll taxes, saves costs, lots of costs. This gives new economy companies an inherent, and maybe even unfair, advantage over the competition.

Company attempts to shed responsibility for their employees—and costs—is an old story. Many years ago, some employers decided that having actual employees was a pain. There were the payroll taxes, the expense and time of hiring, legal exposure to wrongful discharge and discrimination suits if you fired people; all in all, too much trouble. So, employers offloaded employees and their work to temporary help agencies and contracting organizations, which is one reason that “nonstandard employment” has grown so rapidly and there are even associations representing the interests of the many companies operating in this industry.

The IRS and state employment services feared that they were going to lose out on unemployment and payroll taxes from independent contractors. So, they developed a checklist to ascertain whether “nonemployees” doing work for some company actually were or were not employees, and they conducted audits to ensure employees were treated as such.

The jig may soon be up

Cities and states are beginning to try to impose some oversight on at least some of the new economy companies, although such efforts are often met with derision and characterized as stifling innovation. I am not sure that avoiding responsibility and legal liability is really as “innovative” as is sometimes claimed. Bypassing zoning regulations on where hotels can be located and negating licensing requirements related to who can pick up passengers poses risks that, if you believe the terms of service agreements, truly should make the buyer beware.

For those people who worry about income inequality, there is another reason to think twice about these new business models. In a careful analysis of 53 countries from 1960 to 2006, University of Michigan business school professor Gerald F. Davis and a colleague found that the higher proportion of employees who worked in large companies, the lower the level of income inequality. This makes sense because internal labor markets and the greater social contact among employees reduces variation in wages much more so than in market-like arrangements.

Call me old-fashioned, but I actually like a company whose “terms of service” entails providing the product or service I am purchasing rather than stating all the things it is not responsible for. I prefer to buy from a company that stands behind its products, with management that cares enough about its customers to provide oversight of its employee workforce and quality assurance for its services.

Jeffrey Pfeffer is Thomas D. Dee II Professor of Organizational Behavior at Stanford’s Graduate School of Business. His latest book, Leadership B.S.: Fixing Workplaces and Careers One Truth at a Time will be published in September, 2015 by HarperCollins.

“Guests who use room service love it, but its future is not looking good,” Conley says.

In April, Conley, a hotel industry veteran, traded “institutionalized” amenities like room service for apartment rental website Airbnb. His job is to make sure Airbnb users are happy whether they rent someone’s college crash pad, a cozy condo or a seaside mansion in Hawaii.

Conley’s hiring is intended to enhance Airbnb’s appeal at a time when it is trying to become a full-fledged hospitality business. To get to the next level, the company has to ensure a certain level of comfort — or at least set realistic expectations — for guests and hosts.

Conley and his hospitality team in San Francisco and Ireland must keep close tabs on Airbnb’s 800,000 hosts, who range from people who rent out extra rooms in their homes to mini real estate moguls who list a number of apartments. Hosts are supposed to stick to nine standards including accuracy of their online listings and keeping homes tidy.

Earlier this year, Conley embarked on a 17-city world tour training hosts on what he calls, the “five moments of truth” for Airbnb travelers. It hammers home the importance of impressing guests as soon as they step in the door and being responsive to their questions and needs.

Still, problems may pop up. When guests complain that a place they’ve rented doesn’t accurately match up with what they see online, Airbnb’s around-the-clock customer service troubleshoots the problem (at least in theory).

In a worst case scenario, people can be moved to a new place or get a refund. Earlier this year, when a New York customer returned home to find an orgy underway in the apartment she rented out, Airbnb took immediate action to ensure the apartment owner had a safe place to stay, reimbursed her for property damage and kicked the Airbnb guest off the service for good.

“The truth is on a peak night this summer we had 450,000 people staying on the site on any one night — it’s like the city of New Orleans,” Conley says. “Will there occasionally be activities that are abhorrent on the site? Yeah, but I’m really proud of our trust and safety team.”

Scenarios like drug-fueled destruction, prostitution, and theft also happen, but they’re infrequent, he argues. For one, Airbnb’s host guarantee, a $1 million policy covering damaged property, is used only one out of every 62,000 times someone stays at an Airbnb listing, the company says.

This week, Airbnb is having 1,400 of its top hosts fly to San Francisco for a three-day conference Conley and Chesky created to recognize and educate hosts. At the event, Conley plans to unveil tools that will help hosts better understand the supply and demand for rooms in their cities.

By the end of the year, Airbnb will roll out a partnership with the widely-used corporate expenses service Concur, so business travelers can more easily expense Airbnb stays. The partnership is one piece in Conley’s larger business travel strategy. Roughly 10% of all Airbnb guests are business travelers, but Conley wants that share to double in the next 12 months.

Conley, 54, has decades of experience to draw from. In 1987, he started Joie de Vivre, a group of boutique hotels that expanded to more than 30 properties before he sold most of the business in 2011. (He still owns 18 hotels.) He also collected several hospitality awards along the way.

Among associates and friends, Conley is known as a sharp entrepreneur who brings his big-hearted philosophy to the office.

“Chip reminds me daily that businesses can be run with soul,” says Joe Gebbia, an Airbnb co-founder and chief product officer.

Zappos CEO Tony Hsieh, who wrote the foreword to Conley’s first book, “Peak,” about lessons culled from his experience at Joie de Vivre, said: “In the business world, there’s this common wisdom that to run a company, you have to choose to run it like a non-profit or a soulless business. Chip has proven you don’t have to choose either approach.”

For three years after selling most of Joie de Vivre, Conley channeled his energies into other ventures: the bestselling self-help book “Emotional Equations” and Fest300, an online guide to the world’s best festivals. He also got more involved with Burning Man, the annual seven-day festival in Nevada’s Black Rock Desert, and co-founded its board.

Then in spring of last year, Airbnb CEO Brian Chesky came knocking. Chesky, who co-founded Airbnb with Gebbia and chief technology officer Nate Blecharchzyk in 2008, had already found success in legitimizing couch surfing as an alternative to staying at a hotel.

The company, valued at $10 billion in its latest round of funding, currently lists over 800,000 places to rent online in 34,000-plus cities. This week, Airbnb introduced Pineapple, a quarterly travel magazine that is distributed to 18,000 Airbnb hosts for free.

Chesky wanted Conley’s advice on how to be an effective, long-lasting CEO. (“And here I am, this old guy who had been a CEO for a long time,” Conley quips.) He also had ambitions of taking Airbnb from a tech company that connected hosts and travelers to a full-fledged hospitality business — something Conley knew a lot about.

When Chesky eventually asked him to consider a bigger company role over an arm-wrestling match, Conley agreed. He liked the idea of helping hosts, or what he calls, “micro-entrepreneurs,” make a living by opening their homes to strangers.

“It’s one thing to jump in a cab or shared car service and go for a 10 minute drive,” he says. “It’s a whole different thing to stay in someone’s home for a few days.”

With his job, Conley aspires for the loftiest of goals. At the startup’s annual executive retreat in Sonoma earlier this year, Chesky asked him where he wants to see Airbnb in 10 years. Conley’s response? I’d love to see us win the Nobel Peace Prize. (Yes, seriously.)

His rationale is that Airbnb is helping with cross-cultural understanding. By staying in someone’s home rather than the local Holiday Inn, guests are being thrust into a different world.

“A lot of times, we tend to villainize the other,” Conley says. “But when people are traveling, getting to know others and turning strangers into friends, we create a world where there are a lot fewer people who seem alien to us.”

Why banks fear Bitcoin

Bitcoin heralds a new age more disruptive than that of today’s Internet. Disruption can be a good thing, especially when it affects banking, a failing set of business models which, for all the tweaks, have been virtually unchanged for millennia. Paradoxically, some banks are afraid of Bitcoin because it would force them to innovate.

Bitcoin is but the most famous example of an emerging technology network with the potential to improve banking. It belongs to the new type of financial animal called crypto currencies, i.e. decentralized, secure money storage and money transfer enabled by the Internet. What Bitcoin, and the even more promising Ripple network do, is not to poke a hole in banking’s basic business models—lending, deposits, trading, and money exchange—but to create the embryos for entirely new markets typically referred to as the Internet of Value. That is, a way for regular folks, as well as specialists, to potentially monetize everything, regardless of location, traditional market access and jurisdiction.

Cryptocurrencies have been with us for over five years, an eternity by Internet time. Using the elegance of mathematics they enable almost instant transfer of value at almost no cost between two parties without the need for a trusted third party. The disruption lies exactly there: in disrupting the intermediaries.

For a few years already, we have been talking about the sharing economy. Companies like AirBnb and Uber have enabled previously untapped, idle assets such as your empty bedroom or your second car to be mobilized for financial gain. Liquidizing such stale assets has added convenience in the utterly inefficient markets of room rentals and transportation services.

The Internet of Value would go a few steps further. Imagine a world where you can literally become your own market maker; you can create markets for any of your own assets—which could be thought of as anything you own, think or do, or can influence others to do.

In contrast, and to the great disappointment of many financial tech (‘fintech’) startups, the Financial Crimes Enforcement Network (FinCEN) last month released new guidance for virtual currency exchanges and payment processors, ruling that such companies may be considered money services businesses under US law and would be subject to new regulations. The ruling is well meaning, but quite contradictory, and, more importantly, wrongheaded. Prematurely imposing such limitations will have little long term impact beyond dulling the US’s innovative edge.

In the 2001 book, The Architecture of Market, my former UC Berkeley colleague Neil Fligstein makes the excellent point that markets cannot be thought of as automatically or magically appearing on their own, neither by individuals acting alone nor by structures and established institutions acting in concert. Rather, markets are elaborate and complex creations by communities with a joint purpose, and they must be sustained by those who use them in order to survive.

In the case of Bitcoin, what is being enabled here is not merely a new market, but a market of markets; a platform for all kinds of new markets to emerge. In it, lies the promise of a transformation, as strange as it sounds, greater than the Internet. Denying such a potential is equal to denying the reality of globalization.

This is why banks had better embrace the experimentation around crypto technologies and business models—in consortia rather than alone, in order to reduce risks and in order to foster and shape the set of appropriate platform innovations that will come over the next decade, one way or another.

Why are bankers afraid of Bitcoin’s impact? Easy, it will lead to ripples across the financial sector, it will create new winners and losers, and it will likely decentralize banking services and create micro markets to an extent not seen since the advances of the barter economy and the market economy combined. In fact, this is what the Internet of Value is all about—erasing the distinction between bartering, money and service exchange in any market. Once each potential good has a financially tradable and storable equivalent, “a bitcoin,” if you will, trade will explode in a myriad of directions impossible to predict by current algorithms. Intermediaries will come and go, and the end points of exchange nodes will become more important. To many bankers, this is a scary thought. To everyone else it is likely quite liberating.

Clearly, there must be regulation. Without regulation, markets are unstable. However, countries that over-regulate a disruptive innovation in its infancy will only lose out on the first waves of that innovation. Several countries seem to be heading that way, and the US is now in the front seat of that wagon. What a pity. The urge to cripple crypto based currencies is futile.

Trond UndheimisSenior Lecturer in Global Economics and Management at the MIT Sloan School of Management. Undheim is also founder ofYegii.com, an insight network that connects companies to global expertise.

On any given day, 20 to 30 dogs run free around DogVacay’s Santa Monica office. But according to CEO Aaron Hirschhorn, it’s not total chaos. “They very quickly establish their pack hierarchy,” he says. “There are a couple who are kind of in charge. Everyone else gets in line. They’re really well behaved.”

Today, the company announces it has raised $25M in a Series B1 round of funding led by Omers Ventures, the venture capital arm of Ontario Municipal Employees Retirement System. GSV Capital, as well as existing investors Science Inc., First Round Capital, Benchmark, Foundation Capital, and DAG Ventures participated. DogVacay has raised a total of $47 million in venture funding.

Founded in 2012, DogVacay’s service has been called “Airbnb for dogs.” Dogbnb, even. Similar to the room-rental marketplace, DogVacay allows dog owners in 3,000 cities to hire one of its 20,000 dog-sitters for their pets. It grew out of a bad experience Hirschhorn had sending his two dogs to a kennel. “It was a ten-day trip, the kennel bill was $1,400, and one dog was hiding under my desk for three days afterwards,” he says. “It was a bad experience for us and for the dogs, and it was expensive.”

Seeing an opportunity, Hirschhorn and his wife started an overnight dog-sitting business on Craigslist. It quickly took off, serving 100 clients in 2011. It became his wife’s full-time job. Having spent some time in the startup scene at two venture capital firms, Hirschhorn saw the startup potential, and DogVacay was born. The company just crossed 1 million nights booked in October, doubling its volume in just five months. (The company would not disclose revenue.) DogVacay has one venture-backed competitor: Seattle-based Rover.com operates in several thousand cities and has raised $25.9 million in funding from investors including PetCo.

Like any disruptive marketplace, there are plenty of potential snags. Airbnb has tussled with regulators in New York and San Francisco. Hirschhorn says the zoning laws vary by state and even by street in some cities, but since its dog-sitters only watch three or fewer dogs per session, they don’t need to be licensed kennel operators. DogVacay carefully screens its dog-watchers, which have an average rating of 4.96 stars out of five on the site. More than 100,000 people have applied to be dog-sitters, but DogVacay has only accepted 20,000, all of which go through interviews, training, and reference checks before joining.

Still, there will be incidents. Recently, a dog under DogVacay’s watch ate some socks and underwear, which got caught in his intestines and required emergency surgery. This is why half of the company’s 70-person team is dedicated to 24-hour customer care, Hirshhorn says, adding that DogVacay has robust insurance that covers emergencies.

The company plans to use the new funds to expand internationally, as it currently only operates in the U.S. and Canada. Omers will be helpful in this cause, says Damien Steel, a director at Omers. “We have offices all around the world, we are a large, large organization, and we’re in a unique position to leverage that,” he says. “I’m looking forward to helping them break into Europe and other markets.” Omers has backed 20 late-state startups like Hootsuite and Wattpad in the last three years, 15 of which the firm led. But DogVacay is its first U.S. investment.

DogVacay also hopes to expand into other dog-related services, such as boarding, day care, walking ,training and grooming. “The pet care market is over $12 billion [a year], and completely fragmented,” Hirshhorn says. Since DogVacay doesn’t have the fixed overhead cost of real estate, DogVacay can expand faster, at a cheaper price, with quality care that’s consistent thanks to DogVacay’s training, he says.